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Legislators fail to implement down payment requirements - (www.ochousingnews.com) Concerns about the availability of mortgage credit appear to be leading regulators to craft new mortgage-lending standards that are less strict than the real-estate industry had initially feared. Regulators at the Federal Reserve on Tuesday backed off of a proposal that would have required banks to hold more capital for certain mortgages, particularly those that have higher loan-to-value ratios for borrowers that have made smaller down payments. The rules are “significantly friendlier” to the housing-finance market—and to homeowners looking for a mortgage with a low down payment—than the initial proposal, wrote Ken Fears of the National Association of Realtors on Wednesday. This is a potential disaster waiting to happen. The lynchpin the the entire home finance system reform package is the requirements for down payments. If this ends up being watered down, the housing market will remain volatile, and future bank bailouts are all but assured. Over the past year, real-estate and mortgage-banking groups have warned that a cocktail of new mortgage regulations would make credit access much more difficult for first-time buyers and other Americans without large amounts of cash for down payments.
Mortgage
funds hit with worst quarter in two decades - (www.reuters.com) Funds that focus on U.S. home loans recorded
their biggest quarterly loss in nearly two decades as investors fled out of bonds in the past six weeks on fears
that less stimulus from the Federal Reserve will push up interest rates. The 62
open-end, close-end and exchange-traded funds which specialize in
mortgage-backed securities and tracked by Lipper - a unit of Thomson Reuters -
on average posted a 1.87 percent loss in the second quarter, the steepest
decline since the first quarter of 1994, Lipper said. A global bond market
sell-off started in late May after Fed Chairman Ben Bernanke said the central
bank might make a decision whether to pare its $85 billion monthly purchases of
U.S. government and mortgage bonds later this year.
In Ireland, Dire Echoes of a Bailout Gone Awry - (www.nytimes.com) The Irish bank bailout in the fall of 2008 was
the first one to hit a euro zone country during the credit crisis, and it set
some unfortunate precedents. Now we learn that it was based in no small part on
manipulative lies by venal bankers. The leak of audiotapes of phone
conversations between top officials of Anglo Irish Bank, which was by far the
worst of a very bad lot, has stunned Ireland and
damaged its relations with Germany. It now appears that the bank lied to Irish
officials about how much trouble it was in when the government, at the end of
September 2008, guaranteed all the bank’s liabilities. On one tape, John Bowe,
Anglo Irish’s director of the treasury, conceded that he had no
rational basis for telling the government that 7 billion euros was all it would
take to rescue the bank.
Jeff
Olson Found Not Guilty On All Charges, Dodges Punishment For Anti-Bank Chalk
Protest – (www.huffingtonpost.com)
The jury's decision follows
widespread criticism against the city for choosing to prosecute the case. Olson
had called San Diego City Attorney Jan Goldsmith's decision
"heavy-handed," adding that he hoped he reviews the "First
Amendment of the Constitution and remembers that free speech is protected; just
because you don't like what it says, doesn't mean you can't do it." Olson
had also raised questions about the role Darrell Freeman, vice president of
corporate security for Bank of America, may have played in getting the city to
take up the case. The San Diego Reader reported last week that Freeman had
repeatedly asked the city attorney's office to prosecute Olson, though
Goldsmith has denied being directly involved in launching the case.
WV
Judge grants homeowner damages in Quicken Loans case - (www.statejournal.com) In a strongly-worded judgment, an Ohio County
circuit judge granted a Wheeling homeowner $3,500,000 in punitive damages
against Quicken Loans after the state Supreme Court determined the company
fraudulently promised the homeowner could refinance her loan and fraudulently
concealed an "enormous" balloon payment. The case started when Lourie
Brown and her daughter Monique purchased a duplex in 1988 for $35,000. When
Lourie died in 2002, Monique became "solely responsible," the state
Supreme Court opinion states. Deciding to refinance the project, Brown alleged
the loan was higher than the price she expected on the Internet pop-up ad she
had seen earlier. Although the property was deeded to her daughter, Brown later
obtained the title and continued with the loan process. As a result, she called
Quicken and said she no longer wanted to go through with the loan, but the
$181,700 appraisal was approved the next day, according to the order.
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